Gopal Tiwari

Kathmandu, March 30:

Though Nepal is known as the ‘Switzerland of Asia’ to tourists, over 840 hotels in the country that have an aggregate investment of over Rs 102 billion, are on the brink of collapse, due to lack of security, weak financial support from the government and continuous drop in tourist numbers.

The tourism market size has not been growing as per expectations and is being squeezed by the day by various national and international incidents that have, tourism industry says.

A fresh survey conducted by Hotel Association Nepal (HAN) has clearly stated that some are dying due to financial troubles, lack of tourists and weak security along with a deteriorating business environment. “The dismal performance of hotels is leading them towards closures,” says the survey.

Gautam Das Shrestha, immediate past-president of HAN, expressed serious concerns on the downward performance of hotel industry for the past five years. Shrestha who is also the managing director of Hotel Sherpa, a four star hotel, said, “Even my hotel, which is in front of the Royal Palace, is on the verge of collapse.” During the year 1994-1999, the hotel had paid interests of over Rs 40 million for total loans amounting to Rs 65 million. But after 1999, the drop in tourist numbers has led to a mere Rs 20 million in payment of interest till 2005.

In such a situation, the government has to rescue hotels by giving financial support, Shrestha demanded. Sri Lanka also supported its hotels when they were in crisis by giving interest-free loans, says the hotelier.

“The number of hotels – five star, four star, three star, two star, non-star, resorts totals over 848,” according to the survey. There are six five-star hotels, 12 four-star hotels, 12 three star, 22 two star, 17 one star, 33 resorts and many other category hotels.

With hotels exceeding the number of consumers, the government also should stop giving licenses to operate hotels, hoteliers commented.

Prasiddha Pandey and honorary general secretary of HAN, commented that in the last three decades the hotel sector was one of the most prolific contributors to the national revenue. But in recent years, it has faced serious troubles. Therefore, it needs to be financially supported which will give multiple benefits to the economy, said Pandey while talking to The Himalayan Times.

The hotel sector alone generates 24 per cent of the total foreign currency in the country. It provides employment to over 200,000 people directly and 1.2 million indirectly. Its contribution to the total GDP is estimated at 17.11 per cent and generates 33 per cent of total national revenues.

Income generated from tourism comes to over Rs 47.7 billion, says the survey. The study showed that hotels could serve 10,000 tourists a day. The number of rooms across the country totals to 22,000 and the number of beds to 45,000, says the HAN’s survey.

As per the statistics, the total interest paid by six five-star hotels alone comes to over Rs 1.15 billion between 2000 to 2005 which is much less than repayments made by such hotels between 1994-1999, say hoteliers.